HOLOW filing — read by section

Item 8. Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data. 

 MICROCLOUD HOLOGRAM INC. 

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 

 Page 

 Reports of Independent Registered Public Accounting Firm 
 
 F-2 

 Audited Consolidated Balance Sheets 
 
 F-3 

 Audited Consolidated Statements of Operations and Comprehensive Loss 
 
 F-4 

 Audited Consolidated Statements of Changes in Shareholders’ Deficit 
 
 F-5 

 Audited Consolidated Statements of Cash Flows 
 
 F-6 

 Notes to Audited Consolidated Financial Statements 
 
 F-7 - F-42 

 F- 1 

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM 

 To the shareholders and the board of directors of MicroCloud Hologram
Inc. (formerly known as Golden Path Acquisition Corporation)

 Opinion on the Financial Statements 

 We have audited the accompanying consolidated
balance sheets of MicroCloud Hologram Inc. (formerly known as Golden Path Acquisition Corporation) (the “Company”) as of December
31, 2022 and 2021, the related consolidated statements of income and comprehensive income, changes in shareholders’ equity, and
cash flows, for the years ended December 31, 2022 and 2021, and the related notes (collectively referred to as the “financial statements”).
In our opinion, the financial statements present fairly, in all material respects, the consolidated results of its operations and its
cash flows for the years ended December 31, 2022 and 2021, in conformity with accounting principles generally accepted in the United States
of America.

 Basis for Opinion 

 These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/ AssentSure PAC 

 Assentsure PAC (id# 6783 )
 
 We have served as the Company’s auditor since 2022. 

 Singapore 
 
 March 14, 2023 
 
 F- 2 

 MICROCLOUD HOLOGRAM INC. AND ITS SUBSIDIARIES 

 CONSOLIDATED BALANCE SHEETS 

 As of
 December 31, 
 
 2022 
 
 2021 
 
 ASSETS 
 
 CURRENT ASSETS 
 
 Cash and cash equivalents 
 
 $ 
 21,910,338 
 
 $ 
 7,533,934 
 
 Accounts receivable, net 
 
 11,650,012 
 
 10,711,765 
 
 Prepayments and other current assets 
 
 894,479 
 
 98,063 
 
 Due from related parties 
 
 8,740 
 
 3,139 
 
 Loan receivable 
 
 - 
 
 2,091,844 
 
 Inventories, net 
 
 254,879 
 
 302,178 
 
 Total current assets 
 
 34,718,448 
 
 20,740,923 
 
 NON-CURRENT ASSETS 
 
 Property and equipment, net 
 
 238,920 
 
 46,177 
 
 Prepayment and deposits, net 
 
 60,460 
 
 70,572 
 
 Intangible assets, net 
 
 2,229,386 
 
 3,414,222 
 
 Investments in unconsolidated entities 
 
 - 
 
 251,095 
 
 Right-of-use assets, net 
 
 589,301 
 
 - 
 
 Goodwill 
 
 3,067,317 
 
 3,320,082 
 
 Total non-current assets 
 
 6,185,384 
 
 7,102,148 
 
 Total assets 
 
 $ 
 40,903,832 
 
 $ 
 27,843,071 
 
 LIABILITIES AND SHAREHOLDERS’ EQUITY 
 
 CURRENT LIABILITIES 
 
 Accounts payable 
 
 $ 
 8,874,369 
 
 $ 
 7,378,490 
 
 Advance from customers 
 
 493,539 
 
 134,761 
 
 Other payables and accrued liabilities 
 
 1,964,501 
 
 1,549,492 
 
 Due to related parties 
 
 50,745 
 
 334,985 
 
 Operating lease liabilities - current 
 
 231,483 
 
 - 
 
 Loan payable 
 
 59,444 
 
 - 
 
 Taxes payable 
 
 87,319 
 
 509,924 
 
 Total current liabilities 
 
 11,761,400 
 
 9,907,652 
 
 NON-CURRENT LIABILITIES 
 
 Operating lease liabilities - noncurrent 
 
 373,298 
 
 - 
 
 Deferred tax liabilities 
 
 160,430 
 
 311,827 
 
 Warrant liabilities 
 
 61,709 
 
 - 
 
 Total other liabilities 
 
 595,437 
 
 311,827 
 
 Total liabilities 
 
 12,356,837 
 
 10,219,479 
 
 COMMITMENTS AND CONTINGENCIES 
 
 SHAREHOLDERS’ EQUITY 
 
 Ordinary shares, $ 0.0001 par value 
 
 5,081 
 
 13,511 
 
 Additional paid-in capital 
 
 36,701,010 
 
 4,693,914 
 
 (Accumulated deficit)/Retained earnings 
 
 ( 9,119,628 
 ) 
 
 11,584,829 
 
 Statutory reserves 
 
 1,722,262 
 
 1,340,421 
 
 Accumulated other comprehensive loss 
 
 ( 805,112 
 ) 
 
 ( 9,073 
 ) 

 Total MICROCLOUD HOLOGRAM INC. shareholders’ equity 
 
 28,503,613 
 
 17,623,602 
 
 Non-controlling interest 
 
 43,382 
 
 ( 10 
 ) 

 Total Equity 
 
 28,546,995 
 
 17,623,592 
 
 Total liabilities and shareholders’ equity 
 
 $ 
 40,903,832 
 
 $ 
 27,843,071 
 
 The accompanying notes are an integral part of these consolidated financial statements. 

 F- 3 

 MICROCLOUD HOLOGRAM INC. AND ITS SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME 

 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 OPERATING REVENUES 
 
 Products 
 
 $ 
 18,518,305 
 
 $ 
 16,040,124 
 
 Services 
 
 53,994,530 
 
 40,244,193 
 
 Total Operating Revenues 
 
 72,512,835 
 
 56,284,317 
 
 COST OF REVENUES 
 
 Products 
 
 ( 15,334,302 
 ) 
 
 ( 12,920,058 
 ) 

 Services 
 
 ( 23,999,856 
 ) 
 
 ( 4,126,606 
 ) 

 Total Cost of Revenues 
 
 ( 39,334,158 
 ) 
 
 ( 17,046,664 
 ) 

 GROSS PROFIT 
 
 33,178,677 
 
 39,237,653 
 
 OPERATING EXPENSES 
 
 Provision for doubtful accounts 
 
 ( 442,335 
 ) 
 
 ( 80,875 
 ) 

 Selling expenses 
 
 ( 1,311,399 
 ) 
 
 ( 825,055 
 ) 

 General and administrative expenses 
 
 ( 3,408,608 
 ) 
 
 ( 3,147,858 
 ) 

 Research and development expenses 
 
 ( 49,230,916 
 ) 
 
 ( 22,809,775 
 ) 

 Total operating expenses 
 
 ( 54,393,258 
 ) 
 
 ( 26,863,563 
 ) 

 (LOSS)/INCOME FROM OPERATIONS 
 
 ( 21,214,581 
 ) 
 
 12,374,090 
 
 CHANGE IN FAIR VALUE OF WARRANT LIABILITY 
 
 656,164 
 
 - 
 
 OTHER INCOME/(EXPENSE) 
 
 Finance income, net 
 
 248,043 
 
 98,366 
 
 Impairment loss for unconsolidated entities 
 
 ( 237,777 
 ) 
 
 - 
 
 Other income, net 
 
 146,154 
 
 152,843 
 
 Total other income, net 
 
 156,420 
 
 251,209 
 
 (LOSS)/PROFIT BEFORE INCOME TAXES 
 
 ( 20,401,997 
 ) 
 
 12,625,299 
 
 BENEFIT FOR INCOME TAX 
 
 122,773 
 
 124,732 
 
 NET (LOSS)/INCOME 
 
 $ 
 ( 20,279,224 
 ) 
 
 $ 
 12,750,031 
 
 LESS: NET INCOME/(LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST 
 
 43,392 
 
 ( 10 
 ) 

 NET (LOSS)/INCOME ATTRIBUTABLE TO MICROCLOUD HOLOGRAM INC. ORDINARY SHAREHOLDERS 
 
 $ 
 ( 20,322,616 
 ) 
 
 $ 
 12,750,041 
 
 OTHER COMPREHENSIVE INCOME/(LOSS) 
 
 Foreign currency translation adjustment 
 
 147,929 
 
 ( 5,025 
 ) 

 COMPREHENSIVE (LOSS)/INCOME 
 
 $ 
 ( 20,131,295 
 ) 
 
 $ 
 12,745,006 
 
 LESS: COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST 
 
 43,392 
 
 ( 10 
 ) 

 COMPREHENSIVE (LOSS)/INCOME ATTRIBUTABLE TO MICROCLOUD HOLOGRAM INC. ORDINARY SHAREHOLDERS 
 
 $ 
 ( 20,174,687 
 ) 
 
 $ 
 12,745,016 
 
 WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES 
 
 Weighted average number of ordinary
shares outstanding-Basic and diluted 
 
 20,071,595 
 
 132,000,000 
 
 EARNINGS PER SHARE ATTRIBUTABLE TO MC HOLOGRAM INC. ORDINARY SHAREHOLDERS 
 
 (Loss)/Earnings per ordinary share - Basic and diluted 
 
 $ 
 ( 1.01 
 ) 
 
 $ 
 0.10 
 
 The
accompanying notes are an integral part of these consolidated financial statements. 

 F- 4 

 MICROCLOUD HOLOGRAM INC. AND ITS SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 

 Accumulated 
 
 Ordinary shares 
 
 Additional 
 
 Retained earnings 
 
 other 
 
 Non- 
 
 Par 
 
 paid-in 
 
 Statutory 
 
 comprehensive 
 
 controlling 
 
 Shares 
 
 value 
 
 capital 
 
 reserves 
 
 Unrestricted 
 
 (loss) 
 
 Interest 
 
 Total 
 
 Balance as of January 1, 2021 
 
 132,000,000 
 
 $ 
 13,511 
 
 $ 
 4,693,914 
 
 $ 
 910,636 
 
 $ 
 ( 735,427 
 ) 
 
 $ 
 ( 4,048 
 ) 
 
 $ 
 - 
 
 $ 
 4,878,586 
 
 Net income/(loss) 
 
 - 
 
 - 
 
 - 
 
 - 
 
 12,750,041 
 
 - 
 
 ( 10 
 ) 
 
 12,750,031 
 
 Statutory reserves 
 
 - 
 
 - 
 
 - 
 
 429,785 
 
 ( 429,785 
 ) 
 
 - 
 
 - 
 
 - 
 
 Foreign currency translation 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 ( 5,025 
 ) 
 
 - 
 
 ( 5,025 
 ) 

 Balance as of December 31, 2021 
 
 132,000,000 
 
 13,511 
 
 4,693,914 
 
 1,340,421 
 
 11,584,829 
 
 ( 9,073 
 ) 
 
 ( 10 
 ) 
 
 17,623,592 
 
 Net (loss)/income 
 
 - 
 
 - 
 
 - 
 
 - 
 
 ( 20,322,616 
 ) 
 
 - 
 
 43,392 
 
 ( 20,279,224 
 ) 

 Statutory reserves 
 
 - 
 
 - 
 
 - 
 
 381,841 
 
 ( 381,841 
 ) 
 
 - 
 
 - 
 
 - 
 
 Cancellation of the outstanding shares in MC held by former MC shareholders 
 
 ( 132,000,000 
 ) 
 
 ( 13,511 
 ) 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 ( 13,511 
 ) 

 Initial common shares of Golden Path 
 
 1,708,000 
 
 171 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 171 
 
 Initial common shares of Golden Path subject to possible redemption 
 
 5,750,000 
 
 575 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 575 
 
 Shares converted from rights 
 
 602,050 
 
 60 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 60 
 
 Issuance of common stock to Finder 
 
 380,000 
 
 38 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 38 
 
 Issuance of common stock as consideration of business combination 
 
 44,554,455 
 
 4,455 
 
 32,007,096 
 
 - 
 
 - 
 
 - 
 
 - 
 
 32,011,551 
 
 Redemption of common stock 
 
 ( 2,182,470 
 ) 
 
 ( 218 
 ) 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 ( 218 
 ) 

 Foreign currency translation 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 ( 796,039 
 ) 
 
 - 
 
 ( 796,039 
 ) 

 Balance as of December 31, 2022 
 
 50,812,035 
 
 $ 
 5,081 
 
 $ 
 36,701,010 
 
 $ 
 1,722,262 
 
 $ 
 ( 9,119,628 
 ) 
 
 $ 
 ( 805,112 
 ) 
 
 $ 
 43,382 
 
 $ 
 28,546,995 
 
 The accompanying notes are an integral part of these consolidated financial statements. 

 F- 5 

 MICROCLOUD HOLOGRAM INC. AND ITS SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 CASH FLOWS FROM OPERATING ACTIVITIES: 
 
 Net (loss)/income 
 
 $ 
 ( 20,279,224 
 ) 
 
 $ 
 12,750,031 
 
 Adjustments to reconcile net income to net cash provided by operating activities: 
 
 Depreciation and amortization 
 
 1,017,125 
 
 1,047,427 
 
 Amortization of operating lease right-of-use assets 
 
 236,154 
 
 - 
 
 Provision for doubtful accounts 
 
 442,335 
 
 80,875 
 
 Deferred tax benefits 
 
 ( 130,848 
 ) 
 
 ( 132,130 
 ) 

 Provision for inventory reserve 
 
 - 
 
 13,818 
 
 Interest income 
 
 - 
 
 ( 98,249 
 ) 

 Impairment loss for unconsolidated entities 
 
 237,777 
 
 - 
 
 Loss on disposal fixed assets 
 
 488 
 
 57,381 
 
 Change in fair value of warrant liabilities 
 
 ( 656,164 
 ) 
 
 - 
 
 Change in operating assets and liabilities: 
 
 Accounts receivable 
 
 ( 2,239,932 
 ) 
 
 1,801,544 
 
 Prepayment and other current assets 
 
 ( 823,976 
 ) 
 
 678,662 
 
 Inventories 
 
 24,901 
 
 448,062 
 
 Prepayments and deposits 
 
 4,858 
 
 27,832 
 
 Accounts payable 
 
 2,109,052 
 
 ( 943,581 
 ) 

 Operating lease liabilities 
 
 ( 220,287 
 ) 
 
 - 
 
 Advance from customers 
 
 378,262 
 
 ( 109,613 
 ) 

 Other payables and accrued liabilities 
 
 281,149 
 
 324,305 
 
 Taxes payable 
 
 ( 393,376 
 ) 
 
 217,038 
 
 Net cash (used in)/provided by operating activities 
 
 ( 20,011,706 
 ) 
 
 16,163,402 
 
 CASH FLOWS FROM INVESTING ACTIVITIES: 
 
 Payments for business acquisition payable - related parties 
 
 - 
 
 ( 7,846,707 
 ) 

 Loan to third parties 
 
 ( 1,536,561 
 ) 
 
 ( 14,166,273 
 ) 

 Loan repayment from third parties 
 
 3,517,456 
 
 9,087,520 
 
 Purchases of property and equipment 
 
 ( 270,756 
 ) 
 
 ( 21,292 
 ) 

 Cash received on fixed assets disposal 
 
 - 
 
 94 
 
 Investments in unconsolidated entities 
 
 - 
 
 ( 251,095 
 ) 

 Net cash provided by/(used in) investing activities 
 
 1,710,139 
 
 ( 13,197,753 
 ) 

 CASH FLOWS FROM FINANCING ACTIVITIES: 
 
 Amounts advanced from related
 parties 
 
 - 
 
 283,436 
 
 Amounts advanced to related parties 
 
 ( 5,986 
 ) 
 
 - 
 
 Repayments from related parties 
 
 - 
 
 1,365,811 
 
 Repayments to related parties 
 
 ( 55 
 ) 
 
 ( 1,670,263 
 ) 

 Repayments of third-party loan 
 
 ( 13,375 
 ) 
 
 ( 183,221 
 ) 

 Cash received from recapitalization 
 
 33,216,420 
 
 - 
 
 Proceeds of third-party loan 
 
 74,305 
 
 - 
 
 Net cash provided by/(used in) financing activities 
 
 33,271,309 
 
 ( 204,237 
 ) 

 EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS 
 
 ( 593,338 
 ) 
 
 ( 42,590 
 ) 

 CHANGE IN CASH AND CASH EQUIVALENTS 
 
 14,376,404 
 
 2,718,822 
 
 CASH AND CASH EQUIVALENTS, beginning of period 
 
 7,533,934 
 
 4,815,112 
 
 CASH AND CASH EQUIVALENTS, end of period 
 
 $ 
 21,910,338 
 
 $ 
 7,533,934 
 
 SUPPLEMENTAL CASH FLOW INFORMATION: 
 
 Cash paid for income tax 
 
 $ 
 609 
 
 $ 
 11,306 
 
 Cash paid for interest expense 
 
 $ 
 5,522 
 
 $ 
 3,166 
 
 NON-CASH INVESTING AND FINANCING ACTIVITIES 
 
 Initial recognition of right-of-use assets and lease liabilities 
 
 $ 
 840,185 
 
 $ 
 - 
 
 The accompanying notes are an integral part of these consolidated financial statements. 

 F- 6 

 MICROCLOUD HOLOGRAM INC. AND ITS SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Note 1 — Nature of business and organization 

 MicroCloud Hologram Inc. (formerly known as Golden Path Acquisition Corporation) (“Golden Path” or “the Company”), a Cayman Islands exempted company, is a leading holographic digitalization technology service provider in China, which is committed to providing first-class holographic technology services to the customers worldwide. 

 MC Hologram Inc. (“MC”) is a holding company incorporated on November 10, 2020, under the laws of the Cayman Islands. The Company has no substantive operations other than holding all of the outstanding share capital of Quantum Edge HK Limited (“Mengyun HK”), which was established in Hong Kong on November 25, 2020. Mengyun HK is also a holding company holding all of the outstanding equity of Beijing Xihuiyun Technology Co., Ltd (“Beijing Xihuiyun”) which was established on May 11, 2021 under the law of the People’s Republic of China (“PRC” or “China”). 

 Reorganization 

 On September 10, 2021, MC completed a reorganization of entities under common control of its then existing shareholders, who collectively owned majority of the equity interests of MC. MC, Mengyun HK and Beijing Xihuiyun were established as the holding companies of Shanghai Mengyun. All of these entities are under common control as the same group of shareholders held more than 50% of the voting ownership interest of each entity which results in the consolidation of Shanghai Mengyun and its subsidiaries which have been accounted for as a reorganization of entities under common control at carrying value. 

 After the reorganization, MC owns 100% equity interests of Mengyun HK, Mengyun HK owns 100% equity interests of Beijing Xihuiyun. Mengyun HK and Beijing Xihuiyun together own 100% equity interest of Shanghai Mengyun. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the consolidated financial statements. 

 The Company, through its wholly owned subsidiaries, are mainly engaged in holographic technology: (1) Holographic solutions, and (2) Holographic technology service. The majority of Company’s business activities are carried out in Shenzhen, China. 

 As of December 31, 2022, there are twenty-one subsidiaries under the consolidation of the Shanghai Mengyun. 

 In March 2016, Shanghai Mengyun established wholly owned subsidiaries Shenzhen Mengyun Holographic Technology Co.,Ltd. (“Shenzhen Mengyun”) and Mcloudvr Software Network Technology Co., Limited(“Mcloudvr Software”). Shenzhen Mengyun established Horgos Weiyi Software Technology Co., Ltd. (“Horgos Weiyi”) on September 6, 2016 and Shenzhen Yunao Hongxiang Technology Co., Ltd. (“Shenzhen Yunao”) on December 3, 2021. Shenzhen Mengyun and subsidiaries engaged in holographic integrated entertainment solutions. 

 On June 26, 2017, Shanghai Mengyun acquired Shenzhen Qianhaiyoushi Technology Co., Ltd. (“Qianhai Youshi”) and Qianhai Youshi’s subsidiary Kashgar Youshi Information Technology Co., Ltd. (“Kashgar Youshi”). Qianhai Youshi established wholly owned subsidiaries Horgos Youshi Information Technology Co., Ltd. (“Horgos Youshi”) in November 2020 and acquired Shenzhen Yijia Network Technology Co., Ltd. (“Yijia Network”) in July 2020. Qianhai Youshi and subsidiaries are mainly engaged in holographic content sales and SDK software services. 

 On July 1, 2020, Shenzhen Mengyun acquired Shenzhen Bowei BroadVision Technology Co., Ltd. (“Shenzhen Bowei”), Shenzhen Bowei established wholly owned subsidiaries Horgos BroadVision Technology Co., Ltd. (“Horgos Bowei”) and Broadvision Intelligence (Hong Kong), Ltd. (“Broadvision HK”) in November 2020. Shenzhen Bowei and subsidiaries are mainly engaged in holographic printed circuit board assembly (“PCBA”) solutions. 

 F- 7 

 On October 1, 2020, Shenzhen Mengyun acquired Shenzhen Tianyuemeng Technology Co., Ltd. (“Shenzhen Tianyuemeng”). Shenzhen Tianyuemeng established Horgos Tianyuemeng Technology Co., Ltd. (“Horgos Tianyuemeng”) in October 2020 and Horgos Tianyuemeng Technology Co., Ltd.-Shenzhen Branch (“Horgos Tianyuemeng-SZ”) in March 2021, which was later dissolved on December 10, 2021. Shenzhen Tianyuemeng and subsidiary engaged in holographic advertising services and SDK software services. 

 On October 5, 2020, Shenzhen Mengyun acquired Mcloudvr Software Network Technology HK (“Mcloudvr HK”) for no consideration, which engaged in holographic integrated entertainment solutions, from the majority shareholder of Shanghai Mengyun, as of the acquisition date, there is no operation for Mcloudvr HK. Mcloudvr HK and another two investors established Ocean Cloud Technology Co., Limited. (“Ocean HK”) in November 2021 and Ocean HK established Shenzhen Haiyun Xinsheng Technology Co., Ltd. (“Shenzhen Haiyun”) in December 2021. On January 18, 2022, Shenzhen Haiyun acquired Shenzhen Tata Mutual Entertainment Information Technology Co., Ltd. (“Shenzhen Tata”) for RMB 4 (USD 0.62) from four third parties. Shenzhen Tata further established Horgos Tata Mutual Entertainment Information Technology Co., Ltd. (“Horgos Tata”) on March 22, 2022. On June 30, 2022, Shenzhen Haiyun transferred Shenzhen Tata and its subsidiary to an third party for RMB 1 (USD 0.15). On January 29, 2022, Shenzhen Haiyun established Shenzhen Youmi Technology Co., Ltd. (“Shenzhen Youmi”) under the law of PRC. Shenzhen Youmi further established Horgos Youmi Technology Co., Ltd. (“Horgos Youmi”) on March 17, 2022. On February 18, 2022, Shenzhen Haiyun established Shenzhen Yushian Technology Co., Ltd. (“Shenzhen Yushi”) under the law of PRC. Shenzhen Yushi further established Horgos Yushian Technology Co., Ltd. (“Horgos Yushi”) on March 24, 2022. 

 On June 24, 2021 Shanghai Mengyun established Quanyou Vision Technology Co., Ltd (“Shanghai Quanyou”), which primarily engages in software development and was later dissolved on September 1, 2021. 

 On July 31, 2022, Shenzhen Haiyun acquired Beijing Weixiaohai Technology Co., Ltd. (“Beijing Weixiaohai”), which engaged in advertising service. On October 1, 2022, Shenzhen Haiyun transferred Beijing Weixiaohai to a third party for RMB 1 (USD 0.14). 

 The Company’s main recognized revenue producing assets includes patented holographic software and technology, and customer relationship. The unrecognized revenue producing assets include digital product copyright and licensing. 

 The accompanying consolidated financial statements reflect the activities of the Company and each of the following entities as of December 31, 2022: 

 Schedule of accompanying consolidated financial statements 
 
 Name 
 
 Background 
 
 Ownership 

 Quantum Edge HK Limited (“Mengyun HK”) 
 
 - 
 A Hong Kong company 
 
 100% owned by MC 

 - 
 Formed on November 25, 2020 
 
 - 
 Registered capital of HK 10,000 (USD 1,290) 
 
 - 
 A holding company 
 
 Beijing Xihuiyun Technology Co., Ltd (“Beijing Xihuiyun”) 
 
 - 
 PRC limited liability company 
 
 100% owned by Mengyun HK 

 - 
 Formed on May 11, 2021 
 
 - 
 Registered capital of RMB 207,048,000 (USD 30,000,000) 
 
 - 
 A holding company 
 
 Shanghai Mengyun Holographic Technology Co., Ltd. (“Shanghai Mengyun”) 
 
 - 
 A PRC limited liability company 
 
 81.63% owned by Beijing Xihuiyun and 18.37% owned by Mengyun HK 

 - 
 Formed on March 24, 2016 
 
 - 
 Registered capital of RMB 27,000,000 (USD 4,316,665) 
 
 - 
 Primarily engages in holographic integrated solutions. 
 
 F- 8 

 Name 
 
 Background 
 
 Ownership 

 Shenzhen Mengyun Holographic Technology Co., Ltd. (“Shenzhen Mengyun”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shanghai Mengyun 

 - 
 Formed on March 15, 2016 
 
 - 
 Registered capital of RMB 10,000,000 (USD 1,538,461) 
 
 - 
 Primarily engages in holographic integrated solutions. 
 
 Shenzhen Qianhai Youshi Technology Co., Ltd. (“Qianhai Youshi”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shanghai Mengyun 

 - 
 Formed on August 14, 2014 
 
 - 
 Registered capital of RMB 10,000,000 (USD 1,538,461) 
 
 - 
 Primarily engages in holographic content sales and SDK software services. 
 
 Mcloudvr Software Network Technology Co., Limited (“Mcloudvr Software”) 
 
 - 
 A Seychelles Islands company 
 
 100% owned by Shanghai Mengyun 

 - 
 Formed on February 25, 2016 
 
 - 
 Registered capital of USD 50,000 (No operation and dissolved in May 2019) 
 
 Shenzhen Yijia Network Technology Co., Ltd. (“Yijia Network”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Qianhai Youshi 

 - 
 Formed on September 25, 2008 
 
 - 
 Registered capital of RMB 10,000,000 (USD 1,538,461) 
 
 - 
 Primarily engages in holographic content sales and SDK software services. 
 
 Horgos Youshi Network Technology Co., Ltd. (“Horgos Youshi”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Qianhai Youshi 

 - 
 Formed on November 2, 2020 
 
 - 
 Registered capital of RMB 10,000,000 (USD 1,538,461) 
 
 - 
 Primarily engages in holographic content sales and SDK software services. 
 
 Horgos Weiyi Software Technology Co., Ltd. (“Horgos Weiyi”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Mengyun 

 - 
 Formed on September 6, 2016 
 
 - 
 Registered capital of RMB 10,000,000 (USD 1,538,461) 
 
 - 
 Primarily engages in holographic integrated solutions. 
 
 Shenzhen BroadVision Technology Co., Ltd. (“Shenzhen Bowei”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Mengyun 

 - 
 Formed on April 12, 2016 
 
 - 
 Registered capital of RMB 10,000,000 (USD 1,538,461) 
 
 - 
 Primarily engages in holographic PCBA solutions. 
 
 Mcloudvr Software Network Technology HK Co., Limited (“Mcloudvr HK”) 
 
 - 
 A Hong Kong company 
 
 100% owned by Shenzhen Mengyun 

 - 
 Formed on February 2, 2016 
 
 - 
 Registered capital of HKD 100,000 (USD 12,882) 
 
 - 
 Primarily engages in holographic integrated solutions. 
 
 F- 9 

 Name 
 
 Background 
 
 Ownership 

 Shenzhen Tianyuemeng Technology Co., Ltd. (“Shenzhen Tianyuemeng”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Mengyun 

 - 
 Formed on January 6, 2014 
 
 - 
 Registered capital of RMB 20,000,000 (USD 3,076,922) 
 
 - 
 Primarily engages in holographic advertising services. 
 
 Shenzhen Yunao Hongxiang Technology Co., Ltd. (“Shenzhen Yunao”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Mengyun 

 - 
 Formed on December 3, 2021 
 
 - 
 Registered capital of RMB 5,000,000 (USD 784,671) 
 
 - 
 Advertising service 
 
 Broadvision Intelligence (Hong Kong), Ltd. (“Broadvision HK”) 
 
 - 
 A Hong Kong company 
 
 100% owned by Shenzhen Bowei 

 - 
 Formed on November 5, 2020 
 
 - 
 Registered capital of HKD 10,000 (USD 1,288) 
 
 - 
 No operation 
 
 Horgos BroadVision Technology Co., Ltd. (“Horgos Bowei”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Bowei 

 - 
 Formed on November 4, 2020 
 
 - 
 Registered capital of RMB 1,000,000 (USD 153,846) 
 
 - 
 Primarily engages in holographic PCBA solutions. 
 
 Horgos Tianyuemeng Technology Co., Ltd. (“Horgos Tianyuemeng”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Tianyuemeng 

 - 
 Formed on October 23, 2020 
 
 - 
 Registered capital of RMB 1,000,000 (USD 153,846) 
 
 - 
 Primarily engages in SDK software services. 
 
 Horgos Tianyuemeng Technology Co., Ltd.-Shenzhen Branch (“Horgos Tianyuemeng-SZ”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Horgos Tianyuemeng 

 - 
 Formed on March 19, 2021 
 
 - 
 Registered capital of RMB 1,000,000 (USD 153,846) 
 
 - 
 No operation 
 
 - 
 Dissolved on December 10, 2021 
 
 Shanghai Mengyun Quanyou Vision Technology Co., Ltd (“Shanghai Quanyou”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shanghai Mengyun 

 - 
 Formed on June 24, 2021 
 
 - 
 Registered capital of RMB 1,000,000 (USD 153,846) 
 
 - 
 No operation 
 
 - 
 Dissolved on September 1, 2021 
 
 Ocean Cloud Technology Co., Limited. (“Ocean HK”) 
 
 - 
 A Hong Kong company 
 
 56% owned by Mcloudvr HK 

 - 
 Formed on November 4, 2021 
 
 - 
 Registered capital of HKD 10,000 (USD 1,288) 
 
 - 
 No operation 
 
 F- 10 

 Name 
 
 Background 
 
 Ownership 

 Shenzhen Haiyun Xinsheng Technology Co., Ltd. (“Shenzhen Haiyun”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Ocean HK 

 - 
 Formed on December 3, 2021 
 
 - 
 Registered capital of RMB 50,000,000 (USD 7,846,707) 
 
 - 
 No operation 
 
 Shenzhen Tata Mutual Entertainment Information Technology Co., Ltd. (“Shenzhen Tata”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Haiyun 

 - 
 Formed on January 16, 2020 
 
 - 
 Sold on June 30, 2022 
 
 - 
 Registered capital of RMB 5,000,000 (USD 784,671) 
 
 Shenzhen Youmi Technology Co., Ltd. (“Shenzhen Youmi”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Haiyun 

 - 
 Formed on March 17, 2022 
 
 - 
 Registered capital of RMB 5,000,000 (USD 784,671) 
 
 - 
 Game promotion and advertising service 
 
 Shenzhen Yushian Technology Co., Ltd. (“Shenzhen Yushi”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Haiyun 

 - 
 Formed on February 18, 2022 
 
 - 
 Registered capital of RMB 5,000,000 (USD 784,671) 
 
 - 
 Advertising service 
 
 Horgos Tata Mutual Entertainment Information Technology Co., Ltd. (“Horgos Tata”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Tata 

 - 
 Formed on March 22, 2022 
 
 - 
 Sold on June 30, 2022 
 
 - 
 Registered capital of RMB 5,000,000 (USD 784,671) 
 
 - 
 Game promotion service 
 
 Horgos Youmi Technology Co., Ltd. (“Horgos Youmi”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Youmi 

 - 
 Formed on January 29, 2022 
 
 - 
 Registered capital of RMB 5,000,000 (USD 784,671) 
 
 - 
 Advertising service 
 
 Horgos Yushian Technology Co., Ltd. (“Horgos Yushi”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Yushi 

 - 
 Formed on March 24, 2022 
 
 - 
 Registered capital of RMB 5,000,000 (USD 784,671) 
 
 - 
 Advertising service 
 
 Kashgar Youshi Information Technology Co., Ltd. (“Kashgar Youshi”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Qianhai Youshi 

 - 
 Formed on May 5, 2016 
 
 - 
 Registered capital of RMB 5,000,000 (USD 769,230) 
 
 - 
 Primarily engages in holographic content sales and SDK software services. 
 
 Beijing Weixiaohai Technology Co., Ltd. (“Beijing Weixiaohai”) 
 
 - 
 A PRC limited liability company 
 
 100% owned by Shenzhen Haiyun 

 - 
 Formed on April 17, 2019 
 
 - 
 Registered capital of RMB 8,000,000 (USD 1,124,622) 
 
 - 
 Primarily engages in Advertising service. 
 
 F- 11 

 Reverse Recapitalization with Golden Path Acquisition Corporation 

 On September 16, 2022, in accordance with the Business Combination and Merger Agreement dated September 10, 2021 (as amended on August 5, 2022 and August 10, 2022, the “Merger Agreement”), by and among Golden Path, Golden Path Merger Sub Corporation (“Golden Path Merger Sub”), the closing of the Business Combination (the “Closing”) occurred, pursuant to which Golden Path issued 44,554,455 ordinary shares to MC shareholders. Prior to the Transaction Close, the holders of Golden Path ordinary shares had the right to redeem all or a portion of their Golden Path ordinary shares calculated in accordance with Golden Path’s governing documents. At the Closing, each of Golden Path’s public units separated into its components consisting of one ordinary share, one warrant and one right, as a result, the units no longer trade as a separate security. As a result of the closing of the Business Combination, after reflecting the actual redemption of 2,182,470 shares by Golden Path shareholders, MC owns approximately 87.68% of the outstanding Golden Path ordinary shares, the former shareholders of Golden Path owns approximately 11.57% of the outstanding Golden Path ordinary shares, and Peace Asset Management, a private held entity who facilitated the business combination, owns approximately 0.75 % as of December 31, 2022 (not giving effect to any shares issuable to them upon the exercise of any Golden Path warrants). Immediately after giving effect to the Business Combination, MicroCloud has 50,812,035 ordinary shares issued and outstanding, and 6,020,500 warrants outstanding. The proceeds received from the Reverse Recapitalization is $ 33.2 million, net of certain transaction costs. 

 As a result of the consummation of the Business Combination, MC is now a wholly owned subsidiary of the Company, which has changed its name to MicroCloud Hologram Inc. 

 Following the Closing, on September 19, 2022, the ordinary shares and public warrants outstanding upon the Closing began trading on the NASDAQ Stock Exchange (the “NASDAQ”) under the symbols “HOLO” and “HOLOW,” respectively. 

 The transaction was accounted for as a “reverse recapitalization” in accordance with accounting principles generally accepted in the United States (“GAAP”) because the primary assets of Golden Path would be nominal following the close of the Merger. Under this method of accounting, Golden Path was treated as the “acquired” company for financial reporting purposes and MC was determined to be the accounting acquirer based on the terms of the Merger and other factors including: (i) MC’s stockholders have a majority of the voting power of the combined company, (ii) MC comprises a majority of the governing body of the combined company, and MC’s senior management comprises all of the senior management of the combined company, and (iii) MC comprises all of the ongoing operations of the combined entity. Accordingly, for accounting purposes, this transaction was treated as the equivalent of the Company issuing shares for the net assets of Golden Path, accompanied by a recapitalization. The shares and net loss per common share, prior to the Reverse Recapitalization, have been retroactively restated as shares reflecting the Exchange Ratio established in the Reverse Recapitalization (1 Golden Path shares for 1 the Company share). The net assets of Golden Path were recorded at historical costs, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Recapitalization are those of MC. 

 Note 2 — Summary of significant accounting policies 

 Liquidity 

 In assessing the Company’s liquidity, the Company monitors and analyses its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Cash flow from operations, advance from shareholders, and proceeds from third party loan have been utilized to finance the working capital requirements of the Company. As of December 31, 2022, the Company had cash of USD 21.9 million. The Company’s working capital was approximately USD 23.0 million as of December 31, 2022. The Company believes its revenues and operations will continue to grow and the current working capital is sufficient to support its operations and debt obligations as they become due one year through report date. 

 F- 12 

 Basis of presentation 

 The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission, regarding financial reporting, and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operation results. 

 Principles of consolidation 

 The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation. 

 Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. 

 Use of estimates and assumptions 

 The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of property and equipment and intangible assets, impairment of long-lived assets and goodwill, allowance for doubtful accounts, revenue recognition, inventory reserve, purchase price allocation for business combination, uncertain tax position, and deferred taxes. Actual results could differ from these estimates. 

 Foreign currency translation and transaction 

 The functional currency of the Company, Menyun HK, Broadvision HK, and Mcloudvr HK is in US dollars and the functional currency of the Company’s other subsidiaries are Renminbi (“RMB”), as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 “Foreign Currency Matters”. The reporting currency of the Company is also the RMB. 

 Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange in place at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the consolidated statement of operations. 

 In the consolidated financial statements, the financial information of the Company and other entities located outside of the PRC has been translated into RMB. Assets and liabilities of the Company translated from their respective functional currencies to the reporting currency at the exchange rates at the balance sheet dates, equity accounts are translated at historical exchange rates and revenues and expenses are translated at the average exchange rates in effect during the reporting period. The resulting foreign currency translation adjustment are recorded in other comprehensive income (loss). 

 The balance sheet amounts, with the exception of shareholders’ equity for MC, Mengyun HK and Mcloudvr HK at December 31, 2022 and 2021 were translated at RMB 1.00 to USD 0.1450 and to USD 0.1569 , respectively. The average translation rates applied to statement of income accounts for the years ended December 31, 2022 and 2021 were RMB 1.00 to USD 0.1486 , and USD 0.1569 , respectively. The shareholders’ equity accounts were stated at their historical rate. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. 

 F- 13 

 Cash and cash equivalents 

 Cash and cash equivalents primarily consist of bank deposits with original maturities of six months or less, which are unrestricted as to withdrawal and use. Cash and cash equivalents also consist of funds earned from the Company’s operating revenues which were held at third party platform fund accounts which are unrestricted as to immediate use or withdrawal. The Company maintains most of its bank accounts in the PRC. 

 Accounts receivable, net 

 Accounts receivables include trade accounts due from customers. Accounts are considered overdue after 90 days. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and provides an allowance when necessary. The allowance is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of collections. Account balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is not probable. As of December 31, 2022 and 2021, the Company has $ 705,060 and $ 296,051 of allowance for doubtful accounts for accounts receivable, respectively. 

 Inventories, net 

 Inventories are comprised of raw material and finish goods are stated at the lower of cost or net realizable value using the weighted average method. Cost of finished goods comprise direct material and outsourced assembling costs. Management reviews inventories for obsolescence and cost in excess of net realizable value periodically when appropriate and records a reserve against the inventory when the carrying value exceeds net realizable value. As of December 31, 2022 and 2021, the Company has an allowance of $ 25,584 and $ 27,692 , respectively. 

 Prepayments, other current assets and deposits, net 

 Prepayments and other current assets are mainly payments made to vendors or service providers for purchasing goods or services that have not been received or provided, deposits for rent and utilities and employee advances. This amount is refundable and bears no interest. Prepayment and deposit are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. As of December 31, 2022 and 2021, the Company made $ 478 and $ 518 allowance for noncurrent prepayments and deposits, respectively. 

 Due from related parties 

 Due from related parties primarily includes overpayment of acquisition payable to the prior owner of the entity, which the Company acquired in 2017 and advances to the Company’s equity investment investee for operational purpose, interest free and due on demand. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. 

 Loans receivable 

 Loans receivable consists of two loans to third parties, which is carried at cost and includes unpaid principal and interest balances. The Company maintains an allowance for loan losses based on management’s estimate of credit losses inherent in the Company’s loans receivable. As of December 31, 2022, all the loan balance and related accrued interest was fully received. There was no allowance necessary as of December 31, 2022 and 2021. 

 Property and equipment, net 

 Property and equipment are stated at cost less accumulated depreciation and impairment if applicable. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 5% residual value. The estimated useful lives are as follows: 

 F- 14 

 Schedule of estimated useful lives 
 
 Useful Life 
 
 Office equipment 
 
 3 years 
 
 Mechanical equipment 
 
 3 – 5 years 
 
 Electronic equipment 
 
 3 – 5 years 
 
 The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. 

 Intangible assets, net 

 The Company’s intangible assets with definite useful lives primarily consist of customer relationships, software, and non-competing agreements. Identifiable intangible assets resulting from the acquisitions of subsidiaries accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives of three to ten years. 

 Goodwill 

 Goodwill represents the excess of the consideration paid for an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written down to its fair value and the loss is recognized in the consolidated statements of income and comprehensive income. Impairment losses on goodwill are not reversed. 

 The Company has the option to assess qualitative factors to determine whether it is necessary to perform further impairment testing in accordance with ASC 350-20, as amended by ASU 2017-04. If the Company believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the impairment test described below is required. The Company compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, impairment is recognized for the difference, limited to the amount of goodwill recognized for the reporting unit. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being discounted cash flows. 

 Impairment for long-lived assets 

 Long-lived assets, including property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. For the years ended December 31, 2022 and 2021, no impairment of long-lived assets was recognized. 

 F- 15 

 Investments in unconsolidated entities 

 The Company’s investments in unconsolidated entities consist of equity investments without readily determinable fair value. 

 The Company follows ASC Topic 321, Investments Equity Securities (“ASC 321”) to account for investments that do not have readily determinable fair value and over which the Company does not have significant influence. The Company uses the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. 

 An
impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be
other-than temporary. For the years ended of December 31, 2022 and 2021, the Company made $ 237,777 
and Nil - impairment for investments in unconsolidated entities, respectively. 

 Business combination 

 The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expenses in the Company’s consolidated statements of income and comprehensive income. The results of operations of the acquired business are included in the Company’s operating results from the date of acquisition. 

 Fair value measurement 

 U.S. GAAP regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. 

 U.S. GAAP defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follow: 

 Level 1 
 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. 

 Level 2 
 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. 

 Level 3 
 inputs to the valuation methodology are unobservable and significant to the fair value. 

 Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. 

 Noncontrolling Interests 

 The Company’s noncontrolling interests represent the minority shareholders’ ownership interests related to the Company’s subsidiaries, including 44% for Ocean HK and its subsidiaries. The noncontrolling interests are presented in the consolidated balance sheets separately from equity attributable to the shareholders of the Company. Noncontrolling interests in the results of the Company are presented on the consolidated statement of income as allocations of the total income or loss for the year ended December 31, 2022 between noncontrolling interest holders and the shareholders of the Company. 

 F- 16 

 Common Stock Warrants 

 The Company accounts for common stock warrants as either equity instruments or liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), depending on the specific terms of the warrant agreement. 

 Revenue recognition 

 Effective January 1, 2019, the Company adopted ASC Topic 606 using the modified retrospective adoption method. Based on the requirements of ASC Topic 606, revenue is recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. The Company primarily sells its products to hospitals and medical equipment companies. Revenue is recognized when the following 5-step revenue recognition criteria are met: 

 1) 
 Identify the contract with a customer 

 2) 
 Identify the performance obligations in the contract 

 3) 
 Determine the transaction price 

 4) 
 Allocate the transaction price 

 5) 
 Recognize revenue when or as the entity satisfies a performance obligation 

 The Company’s revenue recognition policies effective upon the adoption of ASC 606 are as follows: 

 (i) Holographic Solutions 

 a. Holographic Technology LiDAR Products 

 The Company generates LiDAR revenue through selling integrated circuit board embedded with holographic software. The Company typically enters into written contracts with its customer where the rights of the parties, including payment terms, are identified and sales prices to the customers are fixed with no separate sales rebate, discount, or other incentive and no right of return exists on sales of inventory. The Company’s performance obligation is to deliver products according to contract specifications. The Company recognizes product revenue at a point in time when the control of products is transferred to customers. 

 b. Holographic Technology Intelligence Vision software and Technology Development Service 

 The Company generates revenue by developing ADAS software and technology, which are generally on a fixed-priced basis. The Company has no alternative use for the customized software and the Company has an enforceable right to payment for performance completed to date. Revenues from ADAS software development contracts are recognized over time during the contract period based on the Company’s measurement of progress towards completion using input method, which is usually measured by comparing labor hours expended to date to total estimated labor hours needed to satisfy the performance obligation. As of December 31, 2022 and 2021, the Company’s aggregate amount of transaction price allocated to unsatisfied performance obligation is $ 384,489 and $ 67,535 . Assumptions, risks and uncertainties inherent in the estimates used to measure progress could affect the amount of revenues, receivables and deferred revenues at each reporting period. The Company has a long history of developing various ADAS software resulting in its ability to reasonably estimate the progress toward completion on each fixed price customized contracts. 

 c. Holographic Technology Licensing and Content Products 

 The Company provides holographic content products and holographic software for music videos, shows, and commercials on a fixed-price basis. These contents and software are generally pre-developed and exist when made available to the customer. Content products are delivered through its website or offline using hard drive. 

 F- 17 

 Revenues from licensing and content products are recognized at the point in time when the control of products or services is transferred to customers. No upgrades, maintenance, or any other post-contract customer support are provided. 

 d. Holographic Technology Hardware Sales 

 The Company is a distributer of holographic hardware and generates revenue through resale. In accordance with ASC 606, revenue recognition: principal agent consideration, an entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. Otherwise, the entity is an agent in the transaction. The Company evaluates three indicators of control in accordance with ASU 2016-08: 1) For hardware sales, the Company is the most visible entity to customers and assumes fulfilment risk and risks related to the acceptability of products, including addressing customer complaints directly and handling of product returns or refunds directly. 2) The Company assumes inventory risk after taking the title from vendors and is responsible for product damage during shipment period prior to acceptance of its customers and is also responsible for product return if the customer is not satisfied with the products. 3) The Company determines the resale price of hardware products. 4) The Company is the party that directs the use of the inventory and can prevent the vendor from transferring the product to a customer or to redirect the products to a different customer. After evaluating the above scenario, the Company considers itself the principal of these arrangements and records hardware sales revenue on a gross basis. 

 Hardware sales contracts are on a fixed price basis with no separate sales rebate, discount, or other incentive. Revenue is recognized at a point in time when the Company has delivered products and the acceptance by its customer with no future obligation. The Company generally permits returns of products due to deficits; however, returns are historically insignificant. 

 (ii) Holographic Technology Service 

 Holographic advertisements are the use of holographic technology integrated into advertisements on media platforms and offline display. The Company enters advertising contracts with advertisers to promote merchandises and services where the price, which is generally based on cost per action (“CPA”), is fixed and determinable. The Company provides its advertising service to channel providers where the amounts cost per action are also fixed and determinable. Revenue is recognized at a point of time when agreed actions are performed. The Company considers itself as provider of the services under the CPA model as it has the control of the services at any time before it is transferred to the customers which is evidenced by 1) having a right to a service to be performed by the other party, which gives the Company the ability to direct that party to provide the service to the customers on the Company’s behalf. 2) having discretion in setting the price for the service 3) billing monthly advertising fee directly to customers by settling valid CPA data with customers. Therefore, the Company acts as the principal of these arrangements and reports revenue earned and costs incurred related to these transactions on a gross basis. The Company also provides advertisement services through influencers on social networks. The Company charges advertisers a fixed rate, which is generally a fixed percentage of total value of merchandise sold over a specific period (“GMV”). Revenue is recognized at a point of time when merchandise is sold through social network. 

 The Company’s SDK service is a collection of software development tools in one installable package that enables customers (usually software developers) to add holographic functionality and run holographic advertisements in their APPs or software. SDK contracts are primarily on a fixed rate basis, or cost per SDK Connection. The Company recognizes SDK service revenue at a point in time when a user completes an SDK connection via a designated portal. Service fees are generally billed monthly based on per-connection basis. 

 The Company also provides game promotion services for game developers and licensed game operators. The Company acted as a marketing channel that it will promote the games through in-house or third-party platforms, from which users can download the mobile and purchase virtual currency for in game premium features to enhance their game playing experience. The Company contracts with third party payment platforms for collection services offered to game players who have purchased virtual currency. The game developers, licensed operator, payment platforms and the marketing channels are entitled to profit sharing based on a prescribed percentage of the gross amount charged to the game players. The Company’s obligation in the promotion services is completed at a point in time when the game players made a payment to purchase virtual currency. The Company considered itself an agent in these arrangements since it does not control the services at any time. Accordingly, the Company records the game promotion service revenue on a net basis. 

 F- 18 

 Contract balances : 

 The Company records receivable related to revenue when it has an unconditional right to invoice and receive payment. 

 Payments received from customers before all of the relevant criteria for revenue recognition met are recorded as deferred revenues. 

 The Company’s disaggregate revenue streams are summarized and disclosed in Note 22. 

 Cost of revenues 

 For holographic solutions, the cost of revenue consists primarily of the costs of hardware products sold and outsourced content providers, third party software development costs, and compensation expenses for the Company’s professionals. 

 For holographic technology service, the cost of revenue consists primarily of costs paid to channel distributors for advertising services and compensation expenses for the Company’s professionals. 

 Advertising costs 

 Advertising costs amounted to $ 555,142 and $ 23,308 for the years ended December 31, 2022 and 2021, respectively. Advertising costs are expensed as incurred and included in selling expenses. 

 Research and development 

 Research and development expenses include salaries and other compensation-related expenses to the Company’s research and product development personnel, outsourced subcontractors, as well as office rental, depreciation and related expenses for the Company’s research and product development team. 

 Value added taxes (“VAT”) 

 Revenue represents the invoiced value of service, net of VAT. VAT is based on the gross sales price. The VAT rate is 6% on services and 13% on goods in China. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company’s subsidiaries in China, have been and remain subject to examination by the tax authorities for five years from the date of filing. 

 Income taxes 

 The Company are accounted for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. 

 Deferred taxes is accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the net deferred tax asset will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. 

 F- 19 

 An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit has a greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. 

 Other income, net 

 Other income includes government subsidies which are amounts granted by local government authorities as an incentive for companies to promote development of the local technology industry. The Company receives government subsidies and records such government subsidies as a liability when it is received. The Company records government subsidies as other income when there is no further performance obligation. Total government subsidies amounted to $ 71,156 and $ 12,082 for the years ended December 31, 2022 and 2021, respectively. 

 Other income also includes $ 159,255 and $ 183,681 of input VAT credits the Company redeemed during the year ended December 31, 2022 and 2021, respectively. As part of VAT reform in 2019, from April 1, 2019 to December 31, 2022, a taxpayer in certain service industries could claim an additional 10% of input VAT credit based on total input VAT paid to suppliers, the credit was applied to offset with the Company’s VAT payable. 

 Other income also includes $ 84,257 and $ 42,920 of other non-operating expenses during the year ended December 31, 2022 and 2021, respectively. 

 Operating leases 

 Effective January 1, 2022, the Company adopted ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. On January 1, 2022, the Company recognized approximately RMB 5.7 million (USD 0.9 million) of right of use (“ROU”) assets and approximately RMB 5.7 million (USD 0.9 million) of operating lease liabilities based on the present value of the future minimum rental payments of leases, using incremental borrowing rate of 5.6 % to 7 %. 

 The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All of the Company’s real estate leases are classified as operating leases. 

 When determining the lease payments for an operating lease transitioning to ASC 842 using the effective date, it’s based on future payments at the transition date, based on the present value of lease payments over the remaining lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company use its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. 

 Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. 

 F- 20 

 The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and includes the associated operating lease payments in the undiscounted future pre-tax cash flows. 

 Statutory reserves 

 Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss. 

 Earnings per share 

 The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. 

 Segment reporting 

 ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments. 

 The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial information of the separate operating segments when making decisions about allocating resources and assessing the performance of the group. The Company has determined that it has two operating segments: (1) Holographic solutions, and (2) Holographic technology service. 

 Employee benefits 

 The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $ 688,136 and $ 535,884 the year ended December 31, 2022 and 2021, respectively. 

 F- 21 

 Recently issued accounting pronouncements 

 In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments — Credit Losses — Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. 

 In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-02 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. The Company is still evaluating the impact of the adoption of this ASU on the Company’s consolidated financial statements. 

 In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables — Nonrefundable Fees and Other Costs”. The amendments in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and interim reporting periods beginning July 1, 2021. Early application is not permitted. All entities should apply the amendments in this Update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for Update 2017-08. The adoption of this new standard does not have material impact on Company’s consolidated financial statements and related disclosures. 

 Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. 

 Note 3 — Reverse Recapitalization 

 On September 16, 2022, MC merged with Golden Path Merger Sub and survived the merger and continued as the surviving company and a wholly owned subsidiary of Golden Path and continued its business operations. Immediately prior to the closing of the Merger, holders of 2,182,470 shares of Golden Path ordinary shares exercised their right to redeem such shares. The remaining 3,567,530 public shares converted to MC common stock with the consummation of the Merger. 

 Upon the Closing, 575,000 common ordinary shares were issued to public investors upon exchange of the Public Rights under the Public Units in Golden Path’s IPO. These shares issued were freely tradable. 

 Upon the Closing, 27,050 common ordinary shares were issued to sponsor upon exchange of rights under Private Units in Golden Path’s IPO. These shares issued were subjected to locking restriction. 

 In connection with the Merger, 380,000 shares of Golden Path were issued to Peace Asset upon the Closing, pursuant to an agreement between the Golden Path and Peace Asset Management Ltd. (“Peace Asset”) dated August 3, 2021, as Peace Asset was engaged as the finder to introduce MC to Golden Path in connection with the merge. 

 F- 22 

 As of December 31, 2022 and after giving effect to all exchange, there were 50,812,035 shares of Common Stock outstanding, comprised of the 4,142,530 shares issued to public investors, 1,735,050 common stock hold by founder/sponsor, 380,000 common stocks issued to Peace Asset, and 44,554,455 common stocks issued to MC shareholders. 

 The number of shares of Common Stock issued immediately following the consummation of the Merger was: 

 Schedule of consummation of Merger 
 
 Shares 
 
 Ordinary shares of Golden Path, outstanding prior to Merger 
 
 $ 
 5,750,000 
 
 Less redemption of Golden Path shares 
 
 $ 
 ( 2,182,470 
 ) 

 Public shares following redemptions 
 
 $ 
 3,567,530 
 
 Shares issued upon closing to public shareholders (from rights) 
 
 575,000 
 
 Founder (Sponsor) Shares 
 
 1,708,000 
 
 Shares issued upon closing to Sponsor (from rights) 
 
 27,050 
 
 Shares issued upon closing to Finder (engaged Peace Asset) 
 
 380,000 
 
 MC shares 
 
 $ 
 44,554,455 
 
 Total shares of common stock immediately after Merger 
 
 $ 
 50,812,035 
 
 The Merger was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Golden Path was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of MC are represented as a continuation of the financial statements of Golden Path, with the Merger being treated as the equivalent of MC issuing stock for the net assets of Golden Path, accompanied by a recapitalization. The net assets of Golden Path are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger are those of MC in future reports. 

 MC has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances as of the Closing: (i) MC’s stockholders have a majority of the voting power of the combined company, (ii) MC comprises a majority of the governing body of the combined company, and MC’s senior management comprises all of the senior management of the combined company, and (iii) MC comprises all of the ongoing operations of the combined entity. Following the approval of the Business Combination, on September 16, 2022, we received net cash proceeds of $ 33.2 million from the closing of the Business Combination, net of certain transaction costs. 

 Note 4 — Accounts receivable, net 

 Accounts receivable, net consisted of the following: 

 Schedule of Accounts receivable, net 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Accounts receivable 
 
 $ 
 12,355,072 
 
 $ 
 11,007,816 
 
 Less: allowance for doubtful accounts 
 
 ( 705,060 
 ) 
 
 ( 296,051 
 ) 

 Accounts receivable, net 
 
 $ 
 11,650,012 
 
 $ 
 10,711,765 
 
 Movement of allowance for doubtful accounts is as follows: 

 Schedule of allowance for doubtful accounts 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Beginning balance 
 
 $ 
 296,051 
 
 $ 
 209,456 
 
 Provision for doubtful accounts 
 
 $ 
 442,335 
 
 $ 
 81,661 
 
 Exchange difference 
 
 $ 
 ( 33,326 
 ) 
 
 $ 
 4,934 
 
 Ending balance 
 
 $ 
 705,060 
 
 $ 
 296,051 
 
 Net provision for doubtful accounts for the years ended December 31, 2022 and 2021 amounted to $ 442,335 and $ 81,661 , respectively. 

 F- 23 

 Note 5 — Inventories, net 

 Schedule of inventories, net 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Raw materials 
 
 $ 
 263,304 
 
 $ 
 233,687 
 
 Finished goods 
 
 17,159 
 
 96,183 
 
 Total 
 
 280,463 
 
 329,870 
 
 Less: Inventory allowance 
 
 ( 25,584 
 ) 
 
 ( 27,692 
 ) 

 Inventories, net 
 
 $ 
 254,879 
 
 $ 
 302,178 
 
 As
of December 31, 2022 and 2021, the management of the Company estimated its inventories at the lower of cost or market,
determined on a weighted average method, or net realizable value. The Company recognized Nil 0 and $ 13,818 inventory allowance as of
December 31, 2022 and 2021, respectively. 

 Movement of inventory reserve is as follows: 

 Schedule of inventory reserve 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Beginning balance 
 
 $ 
 27,692 
 
 $ 
 13,556 
 
 Provision for inventory reserve 
 
 - 
 
 13,818 
 
 Exchange difference 
 
 ( 2,108 
 ) 
 
 318 
 
 Ending balance 
 
 $ 
 25,584 
 
 $ 
 27,692 
 
 Note 6 — Property and equipment, net 

 Property and equipment, net consist of the following: 

 Schedule of Property and equipment, net 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Office equipment 
 
 $ 
 165,351 
 
 $ 
 179,526 
 
 Mechanical equipment 
 
 153,566 
 
 166,221 
 
 Electronic and other equipment 
 
 355,875 
 
 99,280 
 
 Vehicles 
 
 6,377 
 
 6,902 
 
 Less: accumulated depreciation 
 
 ( 442,249 
 ) 
 
 ( 405,752 
 ) 

 Total 
 
 $ 
 238,920 
 
 $ 
 46,177 
 
 Depreciation expense for the years ended December 31 30, 2022 and 2021 amounted to $ 69,104 and $ 45,659 , respectively. The loss from disposal of fixed assets amounted to $ 488 and $ 57,381 , for the years ended December 31, 2022 and 2021. 

 F- 24 

 Note 7 — Intangible assets, net 

 The Company’s intangible assets with definite useful lives primarily consist of accounting software. The following table summarizes acquired intangible asset balances as of: 

 Schedule of Intangible assets, net 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Customer relationship 
 
 $ 
 1,928,318 
 
 $ 
 2,087,224 
 
 Software 
 
 2,137,916 
 
 2,314,093 
 
 Non-compete agreements 
 
 333,469 
 
 360,949 
 
 Less: accumulated amortization 
 
 ( 2,170,317 
 ) 
 
 ( 1,348,044 
 ) 

 Total 
 
 $ 
 2,229,386 
 
 $ 
 3,414,222 
 
 Amortization expense charged to operations for the years ended December 31, 2022 and 2021 was $ 948,021 and $ 1,001,768 , respectively. 

 The estimated annual amortization expense for each of the five succeeding fiscal years is as follow: 

 Schedule of estimated annual amortization expense 
 
 Year ending December 31, 
 
 2023 
 
 $ 
 914,588 
 
 2024 
 
 667,044 
 
 2025 
 
 647,666 
 
 2026 
 
 88 
 
 Total 
 
 $ 
 2,229,386 
 
 Note 8 — Prepayment, other assets, and deposits 

 Schedule of current and non current assets 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Current: 
 
 Inventory Purchase 
 
 $ 
 457,875 
 
 $ 
 14,106 
 
 Rent and rent deposits 
 
 18,776 
 
 7,688 
 
 VAT 
 
 129,480 
 
 24,735 
 
 Professional service 
 
 231,066 
 
 10,462 
 
 Other services 
 
 57,282 
 
 41,072 
 
 Prepayment and other current assets 
 
 $ 
 894,479 
 
 $ 
 98,063 
 
 Non-current: 
 
 Rent deposits 
 
 $ 
 59,144 
 
 $ 
 53,998 
 
 Other 
 
 1,794 
 
 17,092 
 
 Allowance for doubtful accounts 
 
 ( 478 
 ) 
 
 ( 518 
 ) 

 Prepayment and deposit 
 
 $ 
 60,460 
 
 $ 
 70,572 
 
 Movement of allowance for doubtful accounts is as follows: 

 Schedule of allowance for doubtful accounts 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Beginning balance 
 
 $ 
 518 
 
 $ 
 1,303 
 
 Recovery of doubtful accounts 
 
 - 
 
 ( 786 
 ) 

 Exchange difference 
 
 ( 40 
 ) 
 
 1 
 
 Ending balance 
 
 $ 
 478 
 
 $ 
 518 
 
 F- 25 

 Note 9 — Goodwill 

 Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. The following table summarizes the components of acquired goodwill balances as of: 

 Schedule of Goodwill 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Goodwill from Shenzhen Bowei acquisition* 
 
 $ 
 1,410,585 
 
 $ 
 1,526,826 
 
 Goodwill from Shenzhen Tianyuemeng acquisition** 
 
 1,656,732 
 
 1,793,256 
 
 Goodwill 
 
 $ 
 3,067,317 
 
 $ 
 3,320,082 
 
 * 
 On July 1, 2020, Shenzhen Mengyun entered into acquisition agreement to acquire 100% equity interests of Shenzhen Bowei, a provider of holographic PCBA solutions. The transaction consummated on July 1, 2020. According to the agreement, acquisition consideration is RMB 20,000,000 (approximately USD 3.1 million) to acquire the 100% equity interests of Shenzhen Bowei. Acquired amortizable intangible assets includes customer relationship, software, and non-compete agreements. Approximately RMB 9.7 million (USD 1.5 million) of goodwill arising from the acquisition is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets under U.S. GAAP, and comprise (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition. 

 ** 
 On October 1, 2020, Shenzhen Mengyun entered into acquisition agreement to acquire 100% equity interests of Shenzhen Tianyuemeng, an entity focused on holographic advertising services. The transaction consummated on October 1, 2020. According to the agreement, acquisition consideration is RMB 30,000,000 (approximately USD 4.6 million) to acquire the 100% equity interests of Shenzhen Tianyuemeng. Acquired amortizable intangible assets includes customer relationship, software, and non-compete agreements. Approximately RMB 11.4 million (USD 1.8 million) of goodwill arising from the acquisition is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets under U.S. GAAP, and comprise (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition. 

 The changes in the carrying amount of goodwill allocated to reportable segments as of December 31, 2021 and December 31, 2022 are as follows 

 Schedule of changes in the carrying amount of goodwill 
 
 Holographic
 solutions 
 
 Holographic
 technology
 service 
 
 Total 
 
 As of December 31, 2021 
 
 $ 
 1,526,826 
 
 $ 
 1,793,256 
 
 $ 
 3,320,082 
 
 As of December 31, 2022 
 
 $ 
 1,410,585 
 
 $ 
 1,656,732 
 
 $ 
 3,067,317 
 
 F- 26 

 Note 11 — Investments in unconsolidated entities 

 Schedule of investments 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Equity investments without readily determinable fair value: 
 
 19.9% Investment (1) 
 
 $ 
 289,973 
 
 $ 
 313,869 
 
 4.4% Investment (2) 
 
 72,493 
 
 78,467 
 
 5% Investment (3) 
 
 86,992 
 
 94,160 
 
 3% Investment (4) 
 
 144,986 
 
 156,934 
 
 Impairment 
 
 ( 594,444 
 ) 
 
 ( 392,335 
 ) 

 Total 
 
 $ 
 - 
 
 $ 
 251,095 
 
 (1) 
 In August 2016, Shenzhen Mengyun invested RMB 2,000,000 in a company in the technology development and animation design areas for 19.9% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 2,000,000 (USD 306,645) impairment loss for the investment in 2018. 

 (2) 
 In November 2015, Shanghai Mengyun invested RMB 500,000 in a company in the database service for 4.44% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 500,000 (USD 76,661) impairment loss for the investment in 2018. 

 (3) 
 In September 2021, Shenzhen Mengyun invested RMB 600,000 in a company specializing in research and development of smart wearable devices for 5% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 600,000 (USD 89,166) impairment loss for the investment in 2022. 

 (4) 
 In October 2021, Shenzhen Mengyun invested RMB 1,000,000 in a company specializing in VR/AR education technology for 3% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 1,000,000 (USD 148,611) impairment loss for the investment in 2022. 

 Note 12 — Loan receivable 

 On September 1, 2021 and October 1, 2021, the Company entered into a RMB 10,000,000 (USD 1,575,746 ) and RMB 4,200,000 (USD 661,813 ) loan agreement, respectively, with a third party to provide funds for their operations. The loan is with 4.35% annual interest rate, no collateral and is due on August 31, 2022 and September 30, 2022, respectively. As of December 31, 2021, the loan balance RMB 14,200,000 (USD 2,228,465 ) and related accrued interest RMB 162,321 (USD 25,474 ) was fully received. 

 On September 1, 2021, the Company entered into a RMB 50,806,587 (USD 7,853,126) loan agreement with a third party to provide funds for their operations with 4.35% annual interest rate, no collateral and is due on August 31, 2022. On October 12, 2021, the Company entered into an amended loan agreement with the third party to increase the loan amount by RMB 25,100,000 (USD 3,939,047) which is due on October 12, 2022. As of December 31, 2021, the loan receivable and related accrued interest was RMB 12,703,387 (USD 1,993,595), and RMB 626,054 (USD 98,249), respectively, which were subsequently received in March 2022. In January 2022, the Company further funded RMB 10,000,000 (USD 1,575,746) to the borrower. As of December 31, 2022, the loan balance RMB 10,000,000 (USD 1,405,778) and related accrued interest RMB 251,326 (USD 35,331) was fully received. 

 F- 27 

 Note 13 — Other payables and accrued liabilities 

 Other payables and accrued liabilities consist of the following: 

 Schedule of Other payables and accrued liabilities 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Employee compensation payable 
 
 $ 
 996,823 
 
 $ 
 895,172 
 
 Payable from prior acquisition* 
 
 563,524 
 
 609,962 
 
 Other 
 
 404,154 
 
 44,358 
 
 $ 
 1,964,501 
 
 $ 
 1,549,492 
 
 * 
 These payables are from an entity acquired in 2015 for inventory purchase, which the Company is still obligated to pay if any of the vendors ask for the payment in the future. 

 Note 14 — Related party balances and transactions 

 The amounts due from related parties consist of the following: 

 Schedule of related parties 
 
 RP Name 
 
 Relationship 
 
 Nature 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Shenzhen Ultimate Holographic Culture Communication Co., Ltd. 
 
 Shenzhen Mengyun’s 19.9% equity investment 
 
 Advances for operational purposes, no interest, due on demand 
 
 $ 
 8,740 
 
 $ 
 3,139 
 
 $ 
 8,740 
 
 $ 
 3,139 
 
 The amounts due to related parties consists of the following: 

 RP Name 
 
 Relationship 
 
 Nature 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Never Stop Holdings Limited 
 
 Former shareholder of Mengyun Cayman

 Advances, no interest, due on demand 
 
 $ 
 - 
 
 $ 
 280,000 
 
 Yuxiu Han 
 
 Former shareholder and current legal representative of Shenzhen Bowei 
 
 Advances for operational purpose, no interest, due on demand 
 
 50,745 
 
 54,927 
 
 Zijuan Han 
 
 Supervisor of Horgos Bowei 
 
 Short-term loan 
 
 - 
 
 58 
 
 $ 
 50,745 
 
 $ 
 334,985 
 
 F- 28 

 Note 15 — Loan payable 

 S hort-term bank borrowings consisted of the following: 

 Schedule of Short-term bank borrowings 
 
 Bank name 
 
 Term 
 
 Interest
 rate 
 
 Collateral/Guarantee 
 
 December 31,
 2022 
 
 Shenzhen Qianhai Webank Co., LTD 
 
 From March 28, 2022 to March 28, 2023 
 
 5.4 % 
 
 Guaranteed by Shenzhen Sme Financing Guarantee Co., LTD 
 
 $ 
 59,444 
 
 $ 
 59,444 
 
 Note 16 — Income taxes 

 Cayman Islands 

 MC was incorporated in the Cayman Islands and is not subject to tax on income or capital gains under the laws of Cayman Islands. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. 

 Seychelles 

 Mcloudvr Software is incorporated in Seychelles and is not subject to tax on income generated outside of Seychelles under the current law. In addition, upon payments of dividends by these entities to their shareholders, no withholding tax will be imposed. 

 Hong Kong 

 Mengyun HK, Broadvision HK, Ocean HK and Mcloudvr HK are incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5 % in Hong Kong. Under Hong Kong tax law, Mengyun HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. 

 PRC 

 The subsidiaries incorporated in the PRC are governed by the income tax laws of the PRC and the income tax provision for operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemptions may be granted on a case-by-case basis. EIT grants preferential tax treatment to certain High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Shanghai Mengyun obtained the “high-tech enterprise” tax status in October 2017 and further renewed in December 2020, which reduced its statutory income tax rate to 15% from January 2017 to December 2023. Shenzhen Mengyun obtained the “high-tech enterprise” tax status in November 2018 and further renewed in December 2021, which reduced its statutory income tax rate to 15% from January 2018 to December 2024. Shenzhen Bowei obtained the “high-tech enterprise” tax status in December 2021, which reduced its statutory income tax rate to 15% from December 2021 to December 2024. 

 Horgos Weiyi, Horgos Youshi, Horgos Bowei and Horgos Tianyuemeng were formed and registered in Horgos in Xinjiang Province, China from 2016 to 2020, and Kashgar Youshi was formed and registered in Kashgar in Xinjiang Provence, China in 2016. These companies are not subject to income tax for 5 years and can obtain another two years of tax exemption status and three years at reduced income tax rate of 12.5% after the 5 years due to the local tax policies to attract companies in various industries. 

 F- 29 

 The Ministry of Finance (“MOF”) and State Administration of Taxation (“SAT”) on January 17, 2019 jointly issued Cai Shui 2019 No. 13. This clarified that from January 1, 2019 to December 31, 2021, eligible small enterprises whose RMB 1,000,000 of annual taxable income is eligible for a 75% reduction on a rate of 20% (i.e., effective rate is 5%) and the income between RMB 1,000,000 and RMB 3,000,000 is eligible for 50% reduction on a rate of 20% (i.e., effective rate is 10%). On April 2, 2021, MOF and SAT further jointly issued Cai Shui 2021 No. 12, which clarified that from January 1, 2022 to December 31, 2022, eligible small enterprises whose RMB 1,000,000 of annual taxable income is eligible for an extra 50% reduction base on Cai Shui 2019 No. 13 (i.e., effective rate is 2.5%). On March 14, 2022, MOF and SAT further jointly issued Cai Shui 2022 No. 13, which clarified that from January 1, 2022 to December 31, 2022, eligible small enterprises whose income between RMB 1,000,000 and RMB 3,000,000 is eligible for an extra 50% reduction base on Cai Shui 2019 No. 13 (i.e., effective rate is 5%). For the years ended December 30, 2021 and 2022, Shenzhen Tianyuemeng and Shenzhen Yunao were eligible to employ this policy. 

 Tax savings for those entities in Xinjiang province including Horgos Weiyi, Horgos Youshi, Horgos Bowei, Kashgar Youshi and Horgos Tianyuemeng and for those entities eligible for small enterprises including Shenzhen Tianyuemeng and Shenzhen Yunao and HNTEs including Shanghai Mengyun, Shenzhen Mengyun and Shenzhen Bowei for the years ended December 31, 2022 and 2021 amounted to $ 186,403 and $ 431,109 , respectively. The preferential tax rate reduction increased earnings per share by $ 0.004 and $ 0.008 for the years ended December 31, 2022 and 2021, respectively. 

 Significant components of the income tax expense (benefit) consisted of the following: 

 Schedule of income tax expense (benefit) 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Current income tax expense 
 
 $ 
 8,075 
 
 $ 
 7,398 
 
 Deferred income tax benefit 
 
 ( 130,848 
 ) 
 
 ( 132,130 
 ) 

 Total 
 
 $ 
 ( 122,773 
 ) 
 
 $ 
 ( 124,732 
 ) 

 The following table reconciles China statutory rates to the Company’s effective tax rate: 

 Schedule of effective tax rate 
 
 For the
 years ended 
 December 31, 
 
 2022 
 
 2021 
 
 China statutory income tax rate 
 
 25.00 
 % 
 
 25.00 
 % 

 Preferential tax rate reduction 
 
 ( 24.51 
 )% 
 
 ( 24.76 
 )% 

 Change in valuation allowance 
 
 ( 2.01 
 )% 
 
 0.44 
 % 

 Additional R&D deduction in China 
 
 0.83 
 % 
 
 ( 1.24 
 )% 

 Permanent difference 
 
 ( 0.06 
 )% 
 
 ( 0.37 
 )% 

 Tax rate difference outside China (1) 
 
 0.04 
 % 
 
 ( 0.04 
 )% 

 Effective tax rate 
 
 ( 0.71 
 )% 
 
 ( 0.97 
 )% 

 (1) 
 It is mainly due to the lower tax rate of the entities incorporated in Hong Kong. 

 F- 30 

 Deferred tax assets and liabilities — China 

 Significant components of deferred tax assets and liabilities were as follows: 

 Schedule of deferred tax assets and liabilities 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Deferred tax assets: 
 
 Allowance for doubtful accounts 
 
 $ 
 37,242 
 
 $ 
 36,847 
 
 Depreciation and amortization 
 
 - 
 
 485 
 
 Impairment loss for investment 
 
 34,797 
 
 - 
 
 Net operating loss carry forward 
 
 494,364 
 
 240,058 
 
 Inventory reserve 
 
 3,838 
 
 6,923 
 
 Right of use 
 
 2,045 
 
 - 
 
 Less: valuation allowance 
 
 ( 442,832 
 ) 
 
 ( 160,172 
 ) 

 Deferred tax assets, net 
 
 129,454 
 
 124,141 
 
 Deferred tax liabilities: 
 
 Recognition of intangible assets arising from business acquisition 
 
 ( 289,884 
 ) 
 
 ( 435,968 
 ) 

 Deferred tax liabilities, net 
 
 ( 289,884 
 ) 
 
 ( 435,968 
 ) 

 Total deferred tax liabilities, net 
 
 $ 
 ( 160,430 
 ) 
 
 $ 
 ( 311,827 
 ) 

 The Company evaluated the recoverable amounts of deferred tax assets, and provided a valuation allowance to the extent that future taxable profits will be available against which the net operating loss and temporary differences can be utilized. Valuation allowance is provided against deferred tax assets when the Company determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Company considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. Valuation allowance was provided for net operating loss carry forward because it was more likely than not that such deferred tax assets would not be realized based on the Company’s estimate of its future taxable income. If events occur in the future that allow the Company to realize more of its deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur. The valuation allowance was increased by $ 282,660 and $ 56,096 for the years ended December 31, 2022 and 2021, respectively. 

 The Company recognized deferred tax liabilities related to the excess of the intangible assets reporting basis over its income tax basis as a result of fair value adjustment from acquisitions in 2020. The deferred tax liabilities will reverse as the intangible assets are amortized for financial statement reporting purposes. 

 As of December 31, 2022, the Company had net operating loss carry forwards of approximately $ 4,714,514 , which arose from Shanghai Mengyun, Shenzhen Mengyun, Qianhai Youshi, Yijia Nework and Shenzhen Bowei, the subsidiaries established in the PRC, and will expire during the period from 2023 to 2027. 

 Uncertain tax positions 

 The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2022 and 2021, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses. As of December 31, 2022 and 2022, the Company also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from December 31, 2022. 

 F- 31 

 Value added taxes (“VAT”) 

 Revenue represents the invoiced value of service, net of VAT. The VAT are based on gross sales price. VAT rate is 6 % on services and 13 % on goods in China. 

 Taxes payable consisted of the following: 

 Schedule of Taxes payable 
 
 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 VAT taxes payable 
 
 $ 
 7,199 
 
 $ 
 414,665 
 
 Income taxes payable 
 
 68,660 
 
 72,359 
 
 Other taxes payable 
 
 11,460 
 
 $ 
 22,900 
 
 Totals 
 
 $ 
 87,319 
 
 $ 
 509,924 
 
 Note 17 — Concentration of risk 

 Credit risk 

 Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and short-term investments consisting of time deposit. In China, the insurance coverage for cash deposits at each bank is RMB 500,000 . As of December 31, 2022 and 2021, cash and time deposit balance of RMB 151,119,985 (USD 21,910,338 ) and RMB 48,006,979 (USD 7,533,934 ) and was deposited with financial institutions located in China, of which 140,010,910 (USD 20,299,674 ) and RMB 39,962,354 (USD 6,271,457 ) was uninsured. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. 

 A majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the PBOC. Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance. 

 To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against the U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to the Company. 

 Customer concentration risk 

 For the years ended December 31, 2022, one customer accounted for 12.9 % of the Company’s total revenues. For the years ended December 31, 2021, one customer accounted for 18.7 % of the Company’s total revenues. 

 As of December 31, 2022, two customers accounted for 26.4 % and 15.8 % of the Company’s accounts receivable, respectively. As of December 31, 2021, two customers accounted for 27.8 %, and 19.9 % of the Company’s accounts receivable, respectively. 

 Vendor concentration risk 

 For the years ended December 31, 2022, one vendor accounted for 13.8 % of the Company’s total purchases. For the years ended December 31, 2021, two vendors accounted for 35.1 % and 15.0 % of the Company’s total purchases, respectively. 

 As of December 31, 2022, two vendors accounted for 63.6 % and 10.0 % of the Company’s accounts payable, respectively. As of December 31, 2021, three vendors accounted for 41.1 %, 18.6 %, and 15.9 % of the Company’s accounts payable, respectively. 

 F- 32 

 Note 18 — Shareholders’ equity 

 Ordinary shares 

 MC was established under the laws of Cayman Islands on November 10, 2020 with authorized share of 500,000,000 ordinary Shares with a par value of USD 0.0001 each, 132,000,000 of which have been issued and are outstanding. 

 At the closing of the Business Combination, the issued and outstanding shares in MC held by the former MC shareholders was cancelled and ceased to exist, in exchange for the issue of an aggregate of 44,554,455 Golden Path Ordinary. 

 The number of shares of Common Stock issued immediately following the consummation of the Merger was 50,812,035 shares with a par value of USD 0.0001 each. (See Note 3) 

 Restricted assets 

 The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiary. Relevant PRC statutory laws and regulations permit payments of dividends by Beijing Xihuiyun and Shanghai Mengyun (collectively “Mengyun PRC entities”) only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Mengyun PRC entities. 

 Mengyun PRC entities are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Mengyun PRC entities may allocate a portion of its after-tax profits based on PRC accounting standards to an enterprise expansion fund and staff bonus and welfare fund at its discretion. Mengyun PRC entities may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange. 

 As a result of the foregoing restrictions, Mengyun PRC entities are restricted in their ability to transfer their assets to the Company. Foreign exchange and other regulations in the PRC may further restrict Mengyun PRC entities from transferring funds to the Company in the form of dividends, loans and advances. As of December 31, 2022 and 2021, amounts restricted are the paid-in-capital and statutory reserve of Mengyun PRC entities, which amounted to $ 6,121,025 and $ 5,739,184 . 

 Statutory reserve 

 During
the year ended December 31, 2022 and 2021, Mengyun PRC entities collectively attributed $ 381,841 
and $ 429,785 ,
of retained earnings for their statutory reserves, respectively. As of December 31, 2022 and 2021, the Company’s
aggregate amount of statutory reserve is $ 1,722,262 and $ 1,340,421 . 

 F- 33 

 Note 19 — Leases 

 The Company has several offices lease agreements with lease terms ranging from two to six years. Upon adoption of ASU 2016-02 on January 1, 2022, the Company recognized approximately RMB 5.7 million (USD 0.9 million) of right of use (“ROU”) assets and approximately RMB 5.7 million (USD 0.9 million) of operating lease liabilities based on the present value of the future minimum rental payments of leases, using incremental borrowing rate of 5.4 to 7.0 %. 

 The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The leases generally do not contain options to extend at the time of expiration. 

 As of December 31, 2022, the Company’s operating leases had a weighted average remaining lease term of approximately 2.93 years. 

 For the years ended December 31, 2022, rent expenses for the operating leases and short-term lease (less than one year) were $ 281,363 and $ 95,067 , respectively. 

 For the years ended December 31, 2021, rent expenses for the operating leases were $ 361,079 . 

 The five-year maturity of the Company’s lease obligations is presented below: 

 Schedule of lease liabilities 
 
 Years ending December 31, 
 
 2023 
 
 $ 
 264,965 
 
 2024 
 
 181,569 
 
 2025 
 
 139,546 
 
 2026 
 
 80,576 
 
 Total lease payments 
 
 666,656 
 
 Less: Interest 
 
 ( 61,875 
 ) 

 Present value of lease liabilities 
 
 $ 
 604,781 
 
 Future amortization of Company’s ROU assets is presented below: 

 Schedule of Future amortization of Company’s ROU assets 
 
 Twelve months ending December 31, 
 
 2023 
 
 $ 
 236,409 
 
 2024 
 
 159,095 
 
 2025 
 
 119,733 
 
 2026 
 
 74,064 
 
 Total 
 
 $ 
 589,301 
 
 F- 34 

 Note 20 — Warrant liabilities 

 As of December 31, 2022, the Company has 5,750,000 public warrants and 270,500 private warrants. 

 The Company accounts for its outstanding Warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F. Management has determined that under the Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Private Warrants as liabilities at their fair value and adjusts the Private Warrants to fair value at each reporting period. Management has further determined that its Public Warrants qualify for equity treatment. Warrant liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations. The Private Warrants are valued using a Black Scholes model. 

 Public Warrants 

 On June 24, 2021, the Company sold 5,750,000 units at a price of $ 10.00 per Public Unit in its Initial Public Offering. Each Public Unit consists of one ordinary share of the Company, $0.0001 par value per share, one right and one redeemable warrant (the “Public Warrant”). Each Public Warrant entitles the holder to purchase one-half (1/2) of an ordinary share at an exercise price of $11.50 per whole share, subject to adjustment as described in Form S-1 Amendment No. 2 filed on June 11, 2021. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares. This means that only an even number of warrants may be exercised at any given time by a warrant holder. 

 No public warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares. It is the Company’s current intention to have an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares in effect promptly following consummation of an initial business combination. 

 The Public Warrants became exercisable on September 16, 2022, the later of (a) the consummation of a Business Combination, which was September 16, 2022, or (b) 12 months from the effective date of the registration statement relating to the Initial Offering, which was June 21, 2021. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file, and within 60 business days following a Business Combination to have declared effective, a registration statement covering the ordinary shares issuable upon exercise of the warrants. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon the exercise of the Public Warrants is not effective within 60 days, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation. 

 The Company may call the warrants for redemption (excluding the Private Warrants), in whole and not in part, at a price of $ 0.01 per warrant: 

 ● 
 at any time while the Public Warrants are exercisable, 

 ● 
 upon not less than 30 days’ prior written notice of redemption to each Public Warrant holder, 

 ● 
 if, and only if, the reported last sale price of the ordinary shares equals or exceeds $ 16.50 per share, for any 20 trading days within a 30-trading day period ending on the third trading day prior to the notice of redemption to Public Warrant holders, and 

 ● 
 if, and only if, there is a current registration statement in effect with respect to the issuance of the ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. 

 F- 35 

 If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless. 

 Private Warrants 

 Simultaneously with the closing of the Initial Public Offering, the Company consummated a private placement of 270,500 Private Units at $ 10.0 per unit, purchased by the sponsor. The Private Units are identical to the units sold in the Initial Public Offering except that the warrants included in the Private Units (the “Private Warrants”) and the ordinary shares issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. 

 The private warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the balance sheets. The warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs. 

 The fair value of these warrants, using the Black-Scholes option pricing model, on the date of issuance was $625,000. Variables used in the option-pricing model include (1) risk-free interest rate at the date of grant (0.90%), (2) expected warrant life of 5 years, (3) expected volatility of 58.40%, and (4) expected dividend yield of 0. 

 The key inputs into the Black-Scholes model were as follows at their following measurement dates: 

 Schedule of Black-Scholes model 
 
 Input 
 
 December 31,
 2022 
 
 December 31,
 2021 
 
 Share price 
 
 $ 
 2.27 
 
 $ 
 9.96 
 
 Risk-free interest rate 
 
 4.02 
 % 
 
 1.26 
 % 

 Volatility 
 
 65.2 
 % 
 
 59.8 
 % 

 Exercise price 
 
 11.50 
 
 11.50 
 
 Warrant life 
 
 4.71 years 
 
 5 years 
 
 As of December 31, 2021, the aggregate value of the private warrants was $ 0.64 million. The change in fair value from December 31, 2021 to June 30, 2022 was approximately $ 77,883 which was included in the historical retained earnings (accumulated deficits) of Golden Path. As of December 31, 2022, the aggregate value of the private warrants was $ 0.062 million. The change in fair value for the year ended of December 31, 2022 was approximately $ 0.656 million. 

 The following table presents information about the Company’s warrants that were measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2022, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. 

 Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis 
 
 Description 
 
 June 30,
 2022 
 
 Quoted Prices In
 Active Markets
 (Level 1) 
 
 Significant Other
 Observable Inputs
 (Level 2) 
 
 Significant Other
 Unobservable Inputs
 (Level 3) 
 
 Liabilities: 
 
 Warrant liability 
 
 $ 
 717,873 
 
 $ 
 - 
 
 $ 
 - 
 
 $ 
 717,873 
 
 F- 36 

 Description 
 
 December 31,
 2022 
 
 Quoted Prices In
 Active Markets
 (Level 1) 
 
 Significant Other
 Observable Inputs
 (Level 2) 
 
 Significant Other
 Unobservable Inputs
 (Level 3) 
 
 Liabilities: 
 
 Warrant liability 
 
 $ 
 61,709 
 
 $ 
 - 
 
 $ 
 - 
 
 $ 
 61,709 
 
 The following table summarizes the Company’s Warrants activities and status of Warrants on December 31, 2022: 

 Schedule of Warrants activities 
 
 Private Warrants 
 
 Warrants 
 
 Weighted 
 Average
 Exercise
 Price Per
 Share 
 
 Average
 Remaining 
 Period
 (Years) 
 
 Outstanding as of June 30, 2021 
 
 270,500 
 
 $ 
 11.50 
 
 5 
 
 Issued 
 
 - 
 
 - 
 
 - 
 
 Forfeited 
 
 - 
 
 - 
 
 - 
 
 Exercised 
 
 - 
 
 - 
 
 - 
 
 Expired 
 
 - 
 
 - 
 
 - 
 
 Outstanding as of June 30, 2022 
 
 270,500 
 
 $ 
 11.50 
 
 5 
 
 Issued 
 
 - 
 
 - 
 
 - 
 
 Forfeited 
 
 - 
 
 - 
 
 - 
 
 Exercised 
 
 - 
 
 - 
 
 - 
 
 Expired 
 
 - 
 
 - 
 
 - 
 
 Outstanding as of December 31, 2022 
 
 270,500 
 
 $ 
 11.50 
 
 5 
 
 Note 21 — Commitments and contingencies 

 Contingencies 

 From time to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the consolidated financial statements. 

 COVID-19 

 The ongoing outbreak of the novel coronavirus (COVID-19) has spread rapidly to many parts of the world. In March 2020, the World Health Organization declared the COVID-19 as a pandemic. The pandemic has resulted in quarantines, travel restrictions, and temporary closure of stores and business facilities in China from February to mid-March in 2020. All of the Company’s business operations and the workforce are concentrated in China, so the Company closed offices and implemented work-from-home policy during that period. Due to the nature of the Company’s business, the impact of the closure on the operational capabilities was not significant. However, the Company’s customers were negatively impacted by the pandemic and reduced their budgets for online advertising and marketing. In addition, the omicron variant of COVID-19 hit China hard in 2022. The surge in positive cases has resulted in local authorities implementing numerous unprecedented measures such as regional quarantines, travel restrictions, routine tests, and temporary closure of stores and business facilities in China, including Shanghai and Shenzhen. The reductions in travel and outdoor activities have caused diminishing market demand on entertainment services, which may negatively impact our business and revenue. The degree to which the pandemic ultimately impacts our business and results of operations will depend on future developments beyond our control, including the severity of the pandemic, the extent of actions to contain or treat the virus, how quickly and to what extent normal economic and operating conditions can resume, and the severity and duration of the global economic downturn that results from the pandemic. 

 F- 37 

 Note 22 — Segments 

 ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments. 

 The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial information of the separate operating segments when making decisions about allocating resources and assessing the performance of the group. The Company has determined that it has two operating segments: (1) Holographic solutions, and (2) Holographic technology service. 

 The summary information by segment are as follows: 

 Schedule of segments 
 
 Holographic
 solutions 
 
 Holographic
 technology
 service 
 
 Total
 December 31,
 2022 
 
 Revenues 
 
 $ 
 22,885,519 
 
 $ 
 49,627,316 
 
 $ 
 72,512,835 
 
 Cost of revenues 
 
 ( 18,696,052 
 ) 
 
 ( 20,638,106 
 ) 
 
 ( 39,334,158 
 ) 

 Gross profit 
 
 4,189,467 
 
 28,989,210 
 
 33,178,677 
 
 Depreciation and amortization 
 
 ( 410,344 
 ) 
 
 ( 606,781 
 ) 
 
 ( 1,017,125 
 ) 

 Total capital expenditures 
 
 $ 
 ( 270,756 
 ) 
 
 $ 
 - 
 
 $ 
 ( 270,756 
 ) 

 Holographic
 solutions 
 
 Holographic
 technology
 service 
 
 Total
 December 31,
 2021 
 
 Revenues 
 
 $ 
 20,695,096 
 
 $ 
 35,589,221 
 
 $ 
 56,284,317 
 
 Cost of revenues 
 
 ( 14,566,478 
 ) 
 
 ( 2,480,186 
 ) 
 
 ( 17,046,664 
 ) 

 Gross profit 
 
 6,128,618 
 
 33,109,035 
 
 39,237,653 
 
 Depreciation and amortization 
 
 ( 406,504 
 ) 
 
 ( 640,923 
 ) 
 
 ( 1,047,427 
 ) 

 Total capital expenditures 
 
 $ 
 ( 20,320 
 ) 
 
 $ 
 ( 972 
 ) 
 
 $ 
 ( 21,292 
 ) 

 Total assets as of: 

 Years ended
 December 31, 
 
 2022 
 
 2021 
 
 Holographic solutions 
 
 $ 
 29,063,408 
 
 $ 
 16,208,983 
 
 Holographic technology service 
 
 11,840,424 
 
 11,634,088 
 
 Total Assets 
 
 $ 
 40,903,832 
 
 $ 
 27,843,071 
 
 Disaggregated information of holographic solutions revenues by business lines are as follows: 

 Schedule of Disaggregation 
 
 Years ended 

 December 31, 
 
 2022 
 
 2021 
 
 Holographic Technology LiDAR Products 
 
 $ 
 6,700,300 
 
 $ 
 9,134,995 
 
 Holographic Technology Intelligence Vision software and Technology Development Service 
 
 1,881,253 
 
 2,213,521 
 
 Holographic Technology Licensing and Content Product 
 
 4,323,541 
 
 4,822,333 
 
 Holographic Hardware Sales 
 
 9,980,425 
 
 4,273,351 
 
 Total Holographic Solutions 
 
 $ 
 22,885,519 
 
 $ 
 20,444,200 
 
 F- 38 

 Note 23 — Subsequent events 

 The Company did not identify any subsequent events that would
have required adjustment or disclosure on the combined and consolidated financial statements. 

 Note 24 — Financial information of the parent company 

 The Company performed a test on the restricted net assets of consolidated subsidiary in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08(e)(3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the financial statements for MC, the parent company. 

 The subsidiary did not pay any dividends to the Company for the six months presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate balance sheets of the Parent Company as “Investment in subsidiary” and the income of the subsidiary is presented as “share of income of subsidiary”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. 

 The Company did not have significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2022. 

 F- 39 

 PARENT COMPANY 

 BALANCE SHEETS 

 Schedule of Condensed Balance Sheets 
 
 December 31,
 2022 
 
 December 31,
 2021 
 
 ASSETS 
 
 Cash 
 
 $ 
 582,069 
 
 $ 
 23,261 
 
 Accounts receivable 
 
 - 
 
 100,000 
 
 Investment in subsidiaries 
 
 28,321,872 
 
 17,929,514 
 
 Total assets 
 
 $ 
 28,903,941 
 
 $ 
 18,052,775 
 
 LIABILITIES AND EQUITY 
 
 LIABILITIES 
 
 Accrued liabilities 
 
 $ 
 338,619 
 
 $ 
 - 
 
 Due to related party 
 
 - 
 
 429,175 
 
 Warrant liabilities 
 
 61,709 
 
 - 
 
 Total liabilities 
 
 400,328 
 
 429,175 
 
 COMMITMENTS AND CONTINGENCIES 
 
 EQUITY 
 
 Ordinary shares, $0.0001 par value 
 
 5,081 
 
 13,511 
 
 Additional paid-in capital 
 
 36,701,010 
 
 4,693,914 
 
 (Accumulated deficit) retained earnings 
 
 ( 9,119,628 
 ) 
 
 11,584,827 
 
 Statutory reserves 
 
 1,722,262 
 
 1,340,421 
 
 Accumulated other comprehensive loss 
 
 ( 805,112 
 ) 
 
 ( 9,073 
 ) 

 Total equity 
 
 28,503,613 
 
 17,623,600 
 
 Total liabilities and equity 
 
 $ 
 28,903,941 
 
 $ 
 18,052,775 
 
 F- 40 

 PARENT COMPANY 

 STATEMENTS OF INCOME AND COMPREHENSIVE INCOME 

 Schedule of Condensed Statements of Income And Comprehensive Income 
 
 For the
 years ended
 December 31, 
 
 2022 
 
 2021 
 
 REVENUES 
 
 $ 
 - 
 
 $ 
 1,100,000 
 
 COST OF REVENUES 
 
 - 
 
 ( 1,020,000 
 ) 

 GROSS PROFIT 
 
 - 
 
 80,000 
 
 COSTS AND EXPENSES 
 
 General and Administrative expenses 
 
 ( 186,367 
 ) 
 
 ( 385,914 
 ) 

 Research and development expenses 
 
 ( 25,000,000 
 ) 
 
 - 
 
 Total costs and expenses 
 
 ( 25,186,367 
 ) 
 
 ( 385,914 
 ) 

 EQUITY INCOME OF SUBSIDIARIES 
 
 4,250,979 
 
 13,055,945 
 
 (LOSS)/INCOME BEFORE INCOME TAXES 
 
 ( 20,935,388 
 ) 
 
 12,750,031 
 
 (LOSS)/INCOME FROM OPERATION 
 
 ( 20,935,388 
 ) 
 
 12,750,031 
 
 CHANGE IN FAIR VALUE OF WARRANT LIABILITIES 
 
 656,164 
 
 - 
 
 PROVISION FOR INCOME TAXES 
 
 - 
 
 - 
 
 NET (LOSS)/INCOME 
 
 $ 
 ( 20,279,224 
 ) 
 
 $ 
 12,750,031 
 
 FOREIGN CURRENCY TRANSLATION ADJUSTMENT 
 
 147,929 
 
 ( 5,025 
 ) 

 COMPREHENSIVE (LOSS)/INCOME 
 
 $ 
 ( 20,131,295 
 ) 
 
 $ 
 12,745,006 
 
 F- 41 

 PARENT COMPANY 

 STATEMENTS OF CASH FLOWS 

 Schedule of Condensed Statements of Cash Flows 
 
 For the
 years ended
 December 31, 
 
 2022 
 
 2021 
 
 CASH FLOWS FROM OPERATING ACTIVITIES: 
 
 Net (loss)/income 
 
 $ 
 ( 20,279,224 
 ) 
 
 $ 
 12,750,031 
 
 Adjustments to reconcile net income to net cash (used in) provided by operating activities: 
 
 Equity income of subsidiaries 
 
 ( 4,250,979 
 ) 
 
 ( 13,055,945 
 ) 

 Change in fair value of warrant liabilities 
 
 ( 656,164 
 ) 
 
 - 
 
 Change in operating assets and liabilities: 
 
 Accounts receivable 
 
 100,000 
 
 ( 100,000 
 ) 

 Other payables and accrued liabilities 
 
 72,923 
 
 429,175 
 
 Net cash (used in)/provided by operating activities 
 
 ( 25,013,444 
 ) 
 
 23,261 
 
 CASH FLOWS FROM FINANCING ACTIVITIES: 
 
 Amounts advanced to subsidiary 
 
 ( 7,644,168 
 ) 
 
 - 
 
 Cash received from recapitalization 
 
 33,216,420 
 
 - 
 
 Net cash provided by financing activities 
 
 25,572,252 
 
 - 
 
 EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS 
 
 $ 
 - 
 
 $ 
 - 
 
 CHANGES IN CASH 
 
 $ 
 558,808 
 
 $ 
 23,261 
 
 CASH, beginning of period 
 
 $ 
 23,261 
 
 $ 
 - 
 
 CASH, end of period 
 
 $ 
 582,069 
 
 $ 
 23,261 
 
 F- 42 

 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 

 None.
MicroCloud Hologram Inc. 10-K

Item 8. Financial Statements and Supplementary Data
